On October 10th, Pirelli held a grand celebration at its Jining, Shandong production base to mark the 20th anniversary of its industrial presence in China. At the celebration, Pirelli Group CEO Andrea Casalucci solemnly stated: “China is, and will continue to be, a key market for Pirelli. Pirelli plans to continue investing in China to deepen its leadership in high-end tires and future mobility technologies.” [Image link: https://media.yunentropy.com/imgs/2026/01/08/fHsPar9zu.jpg] Reports indicate that Pirelli is planning to increase its investment to enhance its stake in the Shenzhou factory. Pirelli’s Director of Media and Government Relations for Asia Pacific stated that there was an agreement to enjoy the increased investment during the 2018 joint venture, but this has not yet been communicated to relevant departments. Pirelli was founded in Milan, Italy in 1872 by Giovanni Battista Pirelli. In 2005, Pirelli established a joint venture with Shandong Huaqin Group to form Pirelli Tire Co., Ltd., located in Huaqin Industrial Park, Yanzhou District, Jining City. This was Pirelli’s first factory in China. In August 2018, the two parties signed another joint venture agreement for the “Shenzhou Intelligent Manufacturing Passenger Car Tire Project,” establishing Jining Shenzhou Tire Co., Ltd. The newly built Pirelli Shenzhou factory, adjacent to the Yanzhou factory, is one of its most advanced factories globally, primarily producing high-end tires and high-performance new energy vehicle tires. Currently, Pirelli has two factories in Shandong, China, and one factory in Jiaozuo, Henan, with a total production capacity of 15 million passenger car tires and 2 million motorcycle tires, employing over 5,000 people. According to the agreement, Pirelli acquired a 49% stake in the Shenzhou factory for approximately €65 million, with the right to increase its shareholding to 70% between January 2021 and December 2025. Currently, the Niu Yishun family and Huaqin Group still hold a 51% stake in the Shenzhou factory.
It is worth noting that in February of this year, Huaqin Group announced an investment of 1.5 billion yuan to build a 4 million-set semi-steel radial tire expansion project for Pirelli and Shenzhou, introducing the world’s most advanced equipment to produce ultra-high-performance, new energy vehicle tires, providing original equipment for Huawei’s HarmonyOS intelligent driving series, Li Auto, NIO, Xiaomi and other high-end electric vehicles.
However, the tire industry is currently in a slump. International tire giants generally faced declining revenue or net profit in the first half of this year, and the net profit of domestic listed tire companies also showed a comprehensive decline. At the same time, tire manufacturers pushed inventory onto channels to boost sales, resulting in high inventory and cash flow difficulties for dealers. However, domestic and joint venture tire companies are expanding production, and the domestic new tire production capacity will exceed 100 million tires by 2025.
</ … In recent years, with the rapid growth of China's new energy vehicle market and the push of Chinese domestic automakers towards high-end products, China has become a key market for high-end tires. Currently, the penetration rate of new energy vehicles in China has exceeded 58%, leading to strong demand for high-end tires and tires specifically designed for electric vehicles. Companies such as Bridgestone and Michelin are also actively expanding their high-end tire production capacity in China. Pirelli stated that the expansion of its Shenzhou factory is underway, with continuous upgrades to its facilities and equipment. The factory produces large-size tires such as 23-inch and 24-inch tires, and domestic OEMs are vying for priority supply rights. In 2024, Pirelli's sales in the Chinese market reached 11% of its global sales, with high-value products accounting for over 90% of its total sales in China. Since 2018, Pirelli has increased its localization efforts and investment in high-value products in China. All four of its core tire technologies are now produced locally, and in 2022, the "Pirelli Asia Pacific R&D Innovation Center" was established at the Shenzhou factory. This continued deep cultivation of the Chinese market has given Pirelli a strong competitive edge in the Chinese high-end tire market.
